Correlation Between Wheaton Precious and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious and Chalice Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Wheaton Precious and Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Chalice Mining Limited, you can compare the effects of market volatilities on Wheaton Precious and Chalice Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Wheaton Precious with a short position of Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Chalice Mining.
Diversification Opportunities for Wheaton Precious and Chalice Mining
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and Chalice is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Wheaton Precious is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Wheaton Precious Metals are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Chalice Mining go up and down completely randomly.
Pair Corralation between Wheaton Precious and Chalice Mining
Assuming the 90 days horizon Wheaton Precious is expected to generate 1.77 times less return on investment than Chalice Mining. But when comparing it to its historical volatility, Wheaton Precious Metals is 2.96 times less risky than Chalice Mining. It trades about 0.07 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Chalice Mining Limited on October 29, 2024 and sell it today you would earn a total of 12.00 from holding Chalice Mining Limited or generate 20.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Chalice Mining Limited
Performance |
| Timeline |
| Wheaton Precious Metals |
| Chalice Mining |
Wheaton Precious and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Chalice Mining
The main advantage of trading using opposite Wheaton Precious and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious position performs unexpectedly, Chalice Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chalice Mining will offset losses from the drop in Chalice Mining's long position.| Wheaton Precious vs. CDL INVESTMENT | Wheaton Precious vs. MCEWEN MINING INC | Wheaton Precious vs. Perseus Mining Limited | Wheaton Precious vs. MidCap Financial Investment |
| Chalice Mining vs. KIMBALL ELECTRONICS | Chalice Mining vs. LPKF Laser Electronics | Chalice Mining vs. Align Technology | Chalice Mining vs. STMicroelectronics NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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